Is Government Regulation/Intervention Good or Bad?

[Scorponok]

Just wonderin' what your thoughts were. Say, if a government steps in and gives a lot of money to Air Canada if they are about to go bankrupt.

Or to only give liscenses to x number of companies to provide telephone services.

In the second example, I can't think that this is ever a good idea. competition is a good thing, and if you only allow x number of companies to provide a service, usually the companies with the permission to set up their business usually don't improve.

In the first example, some people would argue it's good, because if the government doesn't help the business, thousands of Canadians could be out of work or displaced. But then one could also argue that if the company could not make it based upon the merits of their own product, then it doesn't desrve to exist in the first place.

There are plenty of arguments for and against on both sides. Wondering what your thoughts were.



P.S. Sorry if this post doesn't make total sense. I'm about to head home from work and only had a few minutes to make it.

[jolinar of malkshor]

The least amount of government intervention and regulation the best. IMO

[Hemi-Cuda]

some things, not others. i still hate that Alberta has private insurance, it's so much simpler in BC just dealing with one entity. but gov't should never bail out private businesses when they fail due to their own mismanagement

and the reasoning for only allowing so many telcos/cablecos in a given area is due to the infrastructure involved. you wouldn't want to see telephone polls absolutly packed with various cables due to a variety of differnet companies having their own networks. this is why the CRTC mandates that companies such as Shaw and Telus lease out their lines to 3rd party providors, so that you can get the competition without the clutter

[jolinar of malkshor]

Originally Posted by Hemi-Cuda

some things, not others. i still hate that Alberta has private insurance, it's so much simpler in BC just dealing with one entity. but gov't should never bail out private businesses when they fail due to their own mismanagement

and the reasoning for only allowing so many telcos/cablecos in a given area is due to the infrastructure involved. you wouldn't want to see telephone polls absolutly packed with various cables due to a variety of differnet companies having their own networks. this is why the CRTC mandates that companies such as Shaw and Telus lease out their lines to 3rd party providors, so that you can get the competition without the clutter

Your right, when it involves common sense issues like power distribution lines and such. As for insurance, I would only agree with a public system if it broke even. I can't stand the thought of subsidizing some dickhead who has had 3 DUI's and 4 accidents, which happens in some public systems.

[White Doors]

Originally Posted by Hemi-Cuda

some things, not others. i still hate that Alberta has private insurance, it's so much simpler in BC just dealing with one entity. but gov't should never bail out private businesses when they fail due to their own mismanagement

and the reasoning for only allowing so many telcos/cablecos in a given area is due to the infrastructure involved. you wouldn't want to see telephone polls absolutly packed with various cables due to a variety of differnet companies having their own networks. this is why the CRTC mandates that companies such as Shaw and Telus lease out their lines to 3rd party providors, so that you can get the competition without the clutter

True, but a little simplistic. Truth is, the CRTC is the biggest impediment to competion at the moment, especially in light of their recent rulings about VOIP.

[White Doors]

I prefer private insurance myself. I pay less here in Alberta than all of the people I have spoken to in BC.

[Clarkey]

I think natural monopolies should be regulated, like power transmission.

[CaramonLS]

Originally Posted by jolinar of malkshor

Your right, when it involves common sense issues like power distribution lines and such. As for insurance, I would only agree with a public system if it broke even. I can't stand the thought of subsidizing some dickhead who has had 3 DUI's and 4 accidents, which happens in some public systems.

Ok, but really, insurance companies were trying to raise Driving insurance rates yet again even though Alberta had the highest in Canada by FAR. It wasn't until the government stepped in and stopped the BS did something actually happen. Even younger drivers with clean records were getting bent over with insane rates. With the god awful transit system in this city, its no wonder everyone drives a car.

When there is a law and such forcing drivers to have insurance, then yes, definately regulation of an industry such as this needs to be considered, so companies can not completely take advantage.

Energy is another one, electricity for your home is something you need, so regulation by the government in the form of price controls/fixes.

Regulation/Intervention is definately good in some cases, and if it is an essential good, I'd say that there is a really strong case to be made for regulation.

Also, if there is a natural monopoly on a certain industry (Startup costs are extremely high which significantly limits the possible plays in the market, think telephone lines (AT&T/Telus/AGT).) I beleive those industries are partially government regulated, this allowed competitors such as sprint and other Long distance companies to rent part of their network for a fee so they can set up competition to keep prices in line - this was more of a deal in the early 90s. You can apply this sort of logic to Oil/Gas as well, but it isn't entirely a parallel connection.

I hope that at least answered part of your question.

[White Doors]

Originally Posted by Clarkey

I think natural monopolies should be regulated, like power transmission.

But Telco is no longer a 'natural monopoly'.

[White Doors]

Originally Posted by CaramonLS

Ok, but really, insurance companies were trying to raise Driving insurance rates yet again even though Alberta had the highest in Canada by FAR. It wasn't until the government stepped in and stopped the BS did something actually happen. Even younger drivers with clean records were getting bent over with insane rates. With the god awful transit system in this city, its no wonder everyone drives a car.

When there is a law and such forcing drivers to have insurance, then yes, definately regulation of an industry such as this needs to be considered, so companies can not completely take advantage.

Energy is another one, electricity for your home is something you need, so regulation by the government in the form of price controls/fixes.

Regulation/Intervention is definately good in some cases, and if it is an essential good, I'd say that there is a really strong case to be made for regulation.

Also, if there is a natural monopoly on a certain industry (Startup costs are extremely high which significantly limits the possible plays in the market, think telephone lines (AT&T/Telus/AGT).) I beleive those industries are partially government regulated, this allowed competitors such as sprint and other Long distance companies to rent part of their network for a fee so they can set up competition to keep prices in line - this was more of a deal in the early 90s. You can apply this sort of logic to Oil/Gas as well, but it isn't entirely a parallel connection.

I hope that at least answered part of your question.

Regulation on not cutting off heat when it's -35, yes - but not price regulation. That only leads to not investing in infrastructure and in the not-too-long term, higher energy prices for all. Look to Ontario for a good example of this.

[CaramonLS]

Originally Posted by White Doors

Regulation on not cutting off heat when it's -35, yes - but not price regulation. That only leads to not investing in infrastructure and in the not-too-long term, higher energy prices for all. Look to Ontario for a good example of this.

Regulation when the market can't support it is one thing, that will lead to higher energy prices because it creates artificial demand/supply ratio, which is dangerous on a zero profit model, but if all companies are making a fair profit already, that is different.

IF the companies can still make enough profit to sustain infrastructure development, price controls can be ok.

However, there is a fine line between that and blatent price gouging, which shouldn't be allowed with essential goods like electricity.

[White Doors]

Do you have an example of blatent price gouging in NA within the last 10 years?

[CaramonLS]

Originally Posted by White Doors

Do you have an example of blatent price gouging in NA within the last 10 years?

Gasoline? Alberta Auto Insurance?

Regulation for the most part has done a fair job at keeping these things in check, whether it is regulation of the energy industry (enmax has to get price hikes approved by the provincial gov't). The US in particular with Microsoft, the Anti-Trust suits brought forward were a preventive measure to avoid possibly having to go the regulation route in the OS industry.

[White Doors]

Originally Posted by CaramonLS

Gasoline? Alberta Auto Insurance?

Regulation for the most part has done a fair job at keeping these things in check, whether it is regulation of the energy industry (enmax has to get price hikes approved by the provincial gov't). The US in particular with Microsoft, the Anti-Trust suits brought forward were a preventive measure to avoid possibly having to go the regulation route in the OS industry.

But anti-trust suits filed by the public are outside of 'regulation' until they are decided, no? The 'greater public good' can be a scary thing. Short term market volatility should not be mis-construed as price gouging.

What was the price of gas at the labour day weekend again?

[White Doors]

A naturally occuring monopoly is akin to government regulaiton in my opinion. The market always moves faster than regulation. Change is a fact of life. The faster you can change, the better. Regulation inhibits change - ergo competition is reduced and therefore innovation is suppressed.

Not good. Especially when you consider the new realities of the golabalized economy.

[Agamemnon]

If the sole goal of society is the generation of wealth, then no regulation is probably best. Of course... that sounds like a pretty morally shabby society to me.

[Bobblehead]

VOIP is tricky. The backbones are owned by Telus and Shaw. I believe all Telus long distance is VOIP (I read they were one of the first to set this up). Shaw offers VOIP, but then they also stirred up a controversy. They started telling other VOIP providers (ie Vonage) that if those clients didn't pay an additional "Quality of Service" charge, those customers may be subject to latency.
So in this case, Vonage is arguing a free market will result in a 2 tier internet, since Shaw has a reason to discriminate aginst their direct competitors. link

[Hakan]

Originally Posted by Scorponok

Just wonderin' what your thoughts were. Say, if a government steps in and gives a lot of money to Air Canada if they are about to go bankrupt.

Or to only give liscenses to x number of companies to provide telephone services.

In the second example, I can't think that this is ever a good idea. competition is a good thing, and if you only allow x number of companies to provide a service, usually the companies with the permission to set up their business usually don't improve.

In the first example, some people would argue it's good, because if the government doesn't help the business, thousands of Canadians could be out of work or displaced. But then one could also argue that if the company could not make it based upon the merits of their own product, then it doesn't desrve to exist in the first place.

There are plenty of arguments for and against on both sides. Wondering what your thoughts were.



P.S. Sorry if this post doesn't make total sense. I'm about to head home from work and only had a few minutes to make it.

Your first example is an example of expenditure not regulation.

And yes regulation is necessary for goals other than economic efficiency. It's a matter of idealogy over how much regulation you think is necessary but it's really a no-brainer to think that regulation is a good thing.

[Flames Draft Watcher]

I don't think you can generalize about regulation/intervention. I think you have to look at it on an industry by industry basis. Some need more intervention/regulation some none. There's a strong case for gov't intervention in areas like health care and education to name a few.

[White Doors]

Originally Posted by Bobblehead

VOIP is tricky. The backbones are owned by Telus and Shaw. I believe all Telus long distance is VOIP (I read they were one of the first to set this up). Shaw offers VOIP, but then they also stirred up a controversy. They started telling other VOIP providers (ie Vonage) that if those clients didn't pay an additional "Quality of Service" charge, those customers may be subject to latency.
So in this case, Vonage is arguing a free market will result in a 2 tier internet, since Shaw has a reason to discriminate aginst their direct competitors. link

In Alberta, yes. The transport mechanisms are owned By Shaw and Telus.
Shaw doesn't have any phone switches so they in turn lease that part of it out to another telephone company as well. Vonage should have to pay for "Quality of Service" what is wrogn with askign for that? Vonage is asking their carrier to prioritize their data, they should have to pay a premium in my opinion.